(Photo by Thomas Park)
Sometimes a client is not making a request, they are posing a test.
We were pursuing a $30 million systems integration deal with a long-standing energy client. The functions we were installing were of the “mission critical” type, and if something went wrong with the implementation, there was a high risk of substantial losses to the client. Trust and collaboration were the primary buyer values.
Having survived round after round of orals presentations, reviews and questions, the client was ready to make their decision. We had delivered what we viewed as a world-class proposal that demonstrated our understanding of the risks, provided mitigation and would achieve the client’s goals.
We were not the cheapest bidder, we were told. And we were not surprised. We were told, however, we had the best solution.
The client was making its final rounds to decide the winner between us and a key competitor. The sourcing lead contacted our sales lead and said, “We love what you’ve proposed. But we need the price reduced by 30 percent. If you do that, the deal is yours.”
There are always three potential answers to a request for a price reduction: yes, no, and an offer of less than what was asked.
We had several internal meetings to decide our answer. Throughout the process, we had committed to the client that we would provide the most competitive price that we could. We knew how important the success of this engagement was for the future of the client’s business, and we didn’t want price to be a distraction. We were focused on the quality of the work, reduction of risk, and achievement of the client’s goals.
When it came time to answer the client’s request for a price reduction, we said “no.”
The reason, we explained, was that all of our discussions had focused on what it would take to succeed. We said to reduce our price by any amount, thereby causing us to cut back on our solution or staffing, would put success at risk.
We won the deal.
Once the project was underway, we had a “win” review with the client to understand what about our proposal led them to choose us over the other service provider. The issue of the price reduction request came up.
The client said “no” was the right answer. Someone in the client’s executive leadership team proposed asking us for the discount to see whether we had been true to our commitment to provide the best price we could to do the project. The entire exercise was a test. If we had offered a discount, we would have destroyed all of the trust we had established both in our price and our ability to deliver.
And we would have lost the deal.
Of course, if we had not won the deal, we would be asking ourselves “what if” questions to this day. But doing the right thing is always the right thing to do, and you’ll never regret doing the right thing.
